We’ve all heard about Tesla Inc., a buzz-making international corporation based in Palo Alto, California. People usually tend to know that the company operates in the spheres of electric vehicles production, solar panel manufacturing and energy storage. What they do not know are some interesting facts that help to understand the vision and the business model of Tesla better.
- Who is Tesla? The company is named after Nikola Tesla, a Serbian-American scientist and inventor. Dubbed the prophet of electric engineering, Tesla became an inspiration for the company that aims to replace gasoline-dependent vehicles with a cleaner, electricity-driven kind. Born in the 19th century Austrian Empire, this man relocated to the United States to pursue new opportunities (just like Elon Musk himself). He soon came up with inventions that changed the world as we know it. Alternating current, fluorescent bulbs, the Tesla coil, and many more saw the world thanks to this talented inventor. In certain ways Nikola Tesla certainly got ahead of time. Something Elon Musk is also trying to achieve.
- Supercharge me. Being of electric kind, Tesla vehicles rely heavily on the network of superchargers, scattered around the globe. There are currently 1,130 recharge stations, fitted with 8,496 Superchargers. Enough to make daily use of Tesla vehicles a reality in certain countries, but definitely not enough to convince the humanity to get rid of conventional cars. It takes around 30 minutes to recharge a standard Model S or X vehicle to a 170-mile range, which compares unfavorably with gasoline-powered automobiles. On the other hand, it is 4 time less expensive to fully charge your Model X (at least, in the UK) than a regular car.
- Still in the red. A lot of people believe Tesla is destined to solve the problem of air pollution and global warming by finally replacing an internal combustion engine with an electric motor. However, in order to do so, the company will first need to start turning profit, which has yet to be a reality. Over the course of 5 years, Tesla has reported positive quarterly net income results only twice, in March 2013 and September 2016, a poor performance for a company that is no longer a mere start-up. Nobody says that becoming profitable in a highly competitive automotive industry is easy. But in order to achieve full-scale success, the company will need a little bit more financial credibility than it currently has.
- The Golden State. Detroit is rightfully called the cradle of American automotive industry. The big three of General Motors, Ford, and Chrysler all used to have manufacturing facilities in the region. Tesla is trying so hard to be different that located itself on the other side of the country. It is the only major American car manufacturer to be based in California, and far from Detroit. Whether geographic proximity makes Tesla closer to hi-tech giants of the Silicon Valley is yet to be seen.
- To the moon (and back). All of the above is dwarfed by the average growth rate of Tesla shares. By buying TSLA stock back in 2013 you could have increased your initial investment tenfold by now. This fact, however, doesn’t mean that this company constitutes a perfect investment opportunity. Experts have pointed to the fact that TSLA shares are both overvalued and overbought. In the end, what other company can overcome General Motors in terms of the market cap by consistently demonstrating negative financial results? It is hard to predict whether Tesla Inc. will continue going up or will crumble under the weight of its back-breaking liabilities.